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SAP to cut jobs as new apps sales look bleak
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SAP to cut jobs as new apps sales look bleak
"The harsh economic climate for new applications sales among SAP`s Fortune 1000 clients is forcing SAP to re-evaluate long-held employment practices," according to Stuart Williams, senior software analyst at IT analyst firm Technology Business Review (TBR).
However, SAP can also take this opportunity to rationalize the headcount acquired with the Business Objects acquisition to emerge a leaner and more efficient software vendor in 2010.
"While many U.S.-based firms such as Oracle, Sun, and Microsoft have announced RIFs, SAP faces the enormous cultural barrier in Europe for what amounts to lifetime employment. Leo Apothekar and Henning Kagermann, SAP s Co-CEOs are making a pragmatic move in the face of a global recession to rationalize SAP`s headcount," said Williams.
Workforce reduction will help SAP save between 300-350 million euro in 2010. SAP will also extend a salary freeze across 2009 and will reduce third party contracts to the extent possible to help contain expenses.
"The impact of the economic slowdown during the first half of 2009 will be felt strongly, as most of SAP`s large enterprise customers will wait until year s end to commit to new applications projects creating a huge deal closure gap for the first-half of the year," according to TBR.
"However, given the vendor lock and large base, SAP is in no danger of disappearing. SAP will work its existing accounts on an industry-by-industry basis and look to partners for new business in the SME and emerging markets," said Williams.
Source:
http://www.cxotoday.com/India/News/SAP_to_Cut_Jobs_as_New_Apps_Sales_Look_Bleak/
